Inflation must fall to 2% before lowering interest rates – ECB’s Philip Lane

ECB officials are increasingly confident that inflation is heading back to target of 2 per cent and are gearing up to start lowering rates later this year

Philip Lane, ECB chief economist. ‘We need to be further along in the disinflation process before we can be sufficiently confident that inflation will hit the target in a timely manner.’ Picture: RollingNews

The European Central Bank requires more assurance that inflation is returning to its target in order for policymakers to be able to lower interest rates, according to Philip Lane, the lender’s chief economist.

Signalling again that he prefers not to rush policy easing, Lane said Thursday in a speech that while the disinflation process may be unfolding more quickly than anticipated at the moment, the medium-term outlook is less clear.

“In terms of an overall ...